A Short- Run Average Total Cost Curve and a Long-

question 8

Multiple Choice

A short- run average total cost curve and a long- run average cost curve are tangent

• A) where the short- run cost curve is downward sloping.
• B) by coincidence.
• C) where the short- run cost curve is upward sloping.
• D) when the quantity of the fixed factor is at the optimal level for that level of output.
• E) where the short- run cost curve is downward- sloping and the quantity of the fixed factor is optimal.

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Definitions:

Financing

The process of providing or securing funds for business activities, making purchases, or investing.

Investing

The act of allocating resources, often financial, in hopes of generating an income or profit.

Statement of Cash Flows

A financial statement that summarizes the cash inflows and outflows for a company over a period, showing how changes in balance sheet and income affect cash and cash equivalents.

Financing Activity

Activities that result in changes in the size and composition of the equity and borrowings of a company.